CAPE TOWN - Financial services company, Mastercard is launching an initiative to complete the migration to EMV contact and contactless technology in four regions within the next five years.
In a bid to make contactless payments centralised, Mastercard has introduced a roadmap which which will see the rollout of new cards and terminals in Asia, Europe, Latin America and Middle East and Africa from 2018 to 2023.
According to Mastercard, contactless payment is part of the process to drive greater digital payments as opposed to using cash. It also means financial inclusion and customer convenience. In South Africa specifically, the mode of payment has already gained critical momentum.
For those who have never used the system before, contactless payments or “Tap & Go’ means tapping your card on any card reader or retail point of sale terminal that is contactless enabled in order to make a payment. Card holders are generally able to tap their card for any transaction, however for transactions above R500, card holders will be prompted for a PIN once tapping their card.
The tap and go system which was first launched in SA in 2010 has grown tremendously since then with 15% of all in-store purchased globally making use of the technology. Notably, in SA, retail chain such as Pick n Pay and even fast-food chains with the likes of Mcdonalds allow for contactless payments. Certain municipal transit systems allow for the contactless system.
“Today, millions of consumers are able to pay with a simple tap in over 8 million locations across 111 countries. Across the Middle East and Africa, there was a 27-fold increase in contactless transactions in 2017, with the volume spent growing 18x. The demand for contactless payments is strong and growing, with 15% of all in-store purchases globally using the technology”, said the group.
“Mastercard is enabling contactless in POS terminals in Europe, Latin America, Asia Pacific for acquirers as well as the Middle East and Africa regions. Mastercard requires all new cards being issued in those regions, plus the Middle East and Africa, to migrate to EMV contact and contactless. By going further in both geographical scope and technical scope, Mastercard is taking a strong and distinctive leadership position, delivering enhanced security and convenience for consumers around the world. Over time all the banks will change out cards with the new technology and functionality. It is therefore not immediate and allows for adoption through the various countries”, said the group.
When asked why it is important for the contactless system to be made available to more countries and consumers, the group said that EMV technology has gained momentum around the world and now accounts for more than 65% of global card present transactions. However, there are still countries which do not support EMV which results in fraud. Yet, with this new initiative, the remaining gaps in the four regions will be closed. This will inevitably combat fraud patterns.
“Our vision is a world where cardholders never have to wonder if they can pay, conveniently and reliably, wherever they are in the world. Contactless technology enables transactions, in particular low-value purchases, to be completed quickly and securely – enabling an enhanced consumer experience. This provides the opportunity to grow card usage by displacing cash transactions while laying the groundwork for tap-and-go transit and the next generation of digital and mobile payments”, said the group.
Mastercard ensured that contactless payments are secure, convenient and fast. “Our vision is a world where everyone can simply and safely tap their card or device when paying in a store and quickly be on their way. This marks a significant step towards greater consistency, security and speed for everyday payments while laying the groundwork for future innovation. As with any payment process, whether via card or cash, there is still always a measure of customer vigilance required”, concluded the group.